National Rent Declines Continue as October Sees 0.7% Drop
It’s too many units and some shifts since the pandemic.
The Apartment List’s latest national rent report said that median rent has plunged by 0.7% year-over-year, or about $10 for October, hitting $1,394. Year-over-year rental comparisons have been negative for almost 18 months. However, it is still $200 more than it was a few years ago before the revving up of what happened during the pandemic when an influx of capital radically pushed up the price of multifamily properties and the rents needed to sustain business plans.
The rent estimates start with the Census Bureau’s American Community Survey. The firm takes statistics from recent movers, taking them as a proxy for market prices, and then uses a growth rate constructed from real-time transactions that take place on its own platform. They also do a “same-unit, repeat transaction analysis” for what they say is an accurate view of rent growth.
Apartment List also reports on national average vacancy rates that have reached 6.8%, the highest level since the pandemic. This category is calculated as a ratio of unoccupied total units on properties listed on their platform. These assets aren’t a fully representative sample of all in a given market. But the dynamic they reference, a high amount of new inventory entering the rental markets and harming occupancy, the inverse of vacancy, has been widely reported.
Out of the top 100 metro areas in the U.S., 89 saw rents fall month-over-month in keeping with the national trend. On a single year-over-year basis, though, only 49 saw negative rents fall and 51% saw year-over-year drops. The highest rent declines were in Sun Belt metros like Austin (-7.1%), Raleigh (-4.6%), and Jacksonville (-4.1%), which saw higher levels of new apartment completions. In that quarter ending September, 180,000 new apartments hit the market, 21% higher than the previous quarter and the fastest rate since 1974.
This is part of the usual rental market slow season. However, seasonal drops in fall and winter have been steeper than normal since the second half of 2022. Increases in spring and summer are milder. The result is slightly cheaper apartment prices on average.
In typical pre-pandemic years, the fastest growth appeared in May. This year and last, that point came in March. Monthly rent growth used to turn negative in September. In 2023 and 2024, that has moved back to August.